1 FEM 4204 HUMAN CAPITAL PLANNING & DEVELOPMENT: THE GOVT ZURONI MD. JUSOH RESOURCE MGT AND CONSUMER STUDIES, FACULTY OF HUMAN ECOLOGY

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FEM 4204FEM 4204HUMAN CAPITAL PLANNING & HUMAN CAPITAL PLANNING &

DEVELOPMENT: THE GOVTDEVELOPMENT: THE GOVT

ZURONI MD. JUSOHZURONI MD. JUSOHRESOURCE MGT AND CONSUMER STUDIES, RESOURCE MGT AND CONSUMER STUDIES,

FACULTY OF HUMAN ECOLOGYFACULTY OF HUMAN ECOLOGY

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OBECTIVESOBECTIVES

• To analyze the human capital planning To analyze the human capital planning and developmentand development

• To examine the current status of human To examine the current status of human capital development in Malaysiacapital development in Malaysia

• To examine the current status of human To examine the current status of human capital development in various countriescapital development in various countries

• To understand the link between human To understand the link between human capital and labor supplycapital and labor supply

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REFERENCESREFERENCES

• Begg, D., Fischer, S., and Dornbusch, Begg, D., Fischer, S., and Dornbusch, R. (1987) R. (1987) EconomicsEconomics, McGraw Hill, McGraw Hill

• Rahmah Ismail (1996) Rahmah Ismail (1996) Modal Manusia Modal Manusia dan Perolehan Buruhdan Perolehan Buruh, , Dewan Bahasa Dewan Bahasa & Pustaka& Pustaka

• Eigth Malaysia Plan 2001-2005Eigth Malaysia Plan 2001-2005• Seventh Malaysia Plan 1995 - 2000Seventh Malaysia Plan 1995 - 2000• Ninth Malaysia Plan 2006 - 2010Ninth Malaysia Plan 2006 - 2010

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OUTLINEOUTLINE

• Human capital planning and Human capital planning and developmentdevelopment

• The current status of human capital The current status of human capital development in Malaysiadevelopment in Malaysia

• Human capital development in various Human capital development in various countriescountries– Less developed, developing and Less developed, developing and

developed developed

• Human capital and labor supplyHuman capital and labor supply

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Human Resource Planning and Human Resource Planning and DevelopmentDevelopment

• Consisted of the following:Consisted of the following:1.1. Population Population

2.2. Labor force (tenaga buruh)Labor force (tenaga buruh)

3.3. Employment (Guna tenaga) Employment (Guna tenaga)

4.4. EducationEducation

• The goals:The goals:– To increase productivity, per capita To increase productivity, per capita

income and income distributionincome and income distribution

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Human Resource Planning and Human Resource Planning and Development … Development … contcont

• The scope:The scope:– Improving human capitalImproving human capital– Improving the capability of labor marketImproving the capability of labor market– Controlling labor supply through Controlling labor supply through

population controlpopulation control

• The benefits:The benefits:– Individuals: Individuals: job satisfaction; safety and job satisfaction; safety and

personal development; ensured with personal development; ensured with higher incomehigher income

– Institutions:Institutions: Increased/improved Increased/improved creativity, productivity and capability ~ creativity, productivity and capability ~ increases profitincreases profit

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DEMOGRAPHYDEMOGRAPHY SOCIALSOCIAL

The Framework ….The Framework ….

Birth rate; Mortality rate; Family Planning

Health; Nutrition; Poverty; urban dev

POPULATIONPOPULATION

LABORLABOR

Guna Tenaga

EDUCATIONEDUCATION

Tenaga buruh

Preparation; Allocation; Use

Econ aspects (formal & informal)

Non econ aspects

Production capabilities; Per capita Income; Income distribution

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Human Resource/Capital Human Resource/Capital Planning and Development … Planning and Development …

contcont

1.1. The population planning and The population planning and development:development:

– Consisted of:Consisted of:• Demographic aspects:Demographic aspects: birth rate, mortality birth rate, mortality

rate & family planningrate & family planning– 70 million population policy plan70 million population policy plan– RM8: Table 4.1RM8: Table 4.1

• Social aspects:Social aspects: health, nutrition, poverty health, nutrition, poverty and urban developmentand urban development

– It influences and related to the It influences and related to the planning and dev of planning and dev of • Labor force; employment and educationLabor force; employment and education

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Human Resource/Captal Human Resource/Captal Planning and Development … Planning and Development …

contcont

2.2. The Labor related planning and The Labor related planning and development:development:

– Consisted of:Consisted of:• Employment (guna tenaga)Employment (guna tenaga)

– Need to be planned so that the available labor Need to be planned so that the available labor force (tenaga buruh) can be absorbedforce (tenaga buruh) can be absorbed

– RM8: Table 4-2RM8: Table 4-2

• Labor force (tenaga buruh)Labor force (tenaga buruh)– In this aspect what need to be considered are:In this aspect what need to be considered are:

• Preparation of entering the labor marketPreparation of entering the labor market• Budget allocation for improving labor qualityBudget allocation for improving labor quality• Efficient use of laborEfficient use of labor

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contcont

3.3. The educational planning and The educational planning and development:development:

– Consisted of 2 aspects:Consisted of 2 aspects:• Economic:Economic: formal and informal education formal and informal education

– RM8: Table 4-5; Table 4-6; Table 4-7; Table 4-9RM8: Table 4-5; Table 4-6; Table 4-7; Table 4-9– Government allocation for education and Government allocation for education and

training: RM8 Table 4-9training: RM8 Table 4-9

• Non economicNon economic ~ influence the attitude and ~ influence the attitude and charismacharisma

• Both aspects are impt in the development Both aspects are impt in the development of one’s personality and the quality of of one’s personality and the quality of labor supplied.labor supplied.

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contcont

• In short, the process of improving In short, the process of improving human capital: human capital: – Begin at the early stage of child Begin at the early stage of child

development. How?development. How?• Through children’s nutrition intake and Through children’s nutrition intake and

health health

– The process continue when the children The process continue when the children obtain formal and informal educationobtain formal and informal education

– When the children finished schooling, When the children finished schooling, they receive training to improve their they receive training to improve their human capital.human capital.

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contcontHRD and Planning: What is done so HRD and Planning: What is done so

far? far? • RM7RM7 – achieved sustained econ – achieved sustained econ

growth through: growth through: – Increase productivity from Increase productivity from

increased investment in HRD increased investment in HRD and new technologyand new technology

– Efficiency in use of labor Efficiency in use of labor (unemployment rate is low)(unemployment rate is low)

– Strengthening the human Strengthening the human resource base resource base • Thus, the SS of highly skilled Thus, the SS of highly skilled

and trained manpower and trained manpower increased due to expansion increased due to expansion in education and training in education and training institutionsinstitutions

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contcont

• RM8 RM8 – The economy moves towards higher – The economy moves towards higher capital-intensity and knowledge-based capital-intensity and knowledge-based production process.production process.– Thus, the HRD&P goal: to create a critical mass Thus, the HRD&P goal: to create a critical mass

of trained, skilled and knowledge manpower with of trained, skilled and knowledge manpower with the right motivation and attitude the right motivation and attitude to optimize the to optimize the use and development of new technologies and use and development of new technologies and materialsmaterials

• Thus, in RM8 the HRD focus on the Thus, in RM8 the HRD focus on the enhancement of the qualitative aspects of enhancement of the qualitative aspects of human resourceshuman resources

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Human Resource /Capital Human Resource /Capital Planning and Development … Planning and Development …

contcont

• Human Resource Policy Thrust: RM8Human Resource Policy Thrust: RM8– Promoting lifelong learning to enhance employability and Promoting lifelong learning to enhance employability and

productivity of the labor forceproductivity of the labor force– Optimizing the utilization of labor forceOptimizing the utilization of labor force– Increasing the SS of S&T manpowerIncreasing the SS of S&T manpower– Accelerating the implementation of the productivity-linked Accelerating the implementation of the productivity-linked

wage syswage sys– Strengthening labor mkt info sys to increase labor Strengthening labor mkt info sys to increase labor

mobilitymobility– Promoting M’sia as a regional center of educational Promoting M’sia as a regional center of educational

excellenceexcellence– Reinforcing positive valuesReinforcing positive values

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contcont

• Human Resource Policy Thrust: RM8Human Resource Policy Thrust: RM8– Expand the SS of highly skilled and k-Expand the SS of highly skilled and k-

manpower to support the development of k-manpower to support the development of k-economyeconomy

– Increase the accessibility to quality educations Increase the accessibility to quality educations and training to enhance income generation and training to enhance income generation capabilities and QoLcapabilities and QoL

– Improving the quality of teaching and learning Improving the quality of teaching and learning materials, teacher training and educational materials, teacher training and educational support services to ensure that manpower SS support services to ensure that manpower SS is in line with technological change and mkt is in line with technological change and mkt DDDD

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contcont• RMK 9: Teras ke-2RMK 9: Teras ke-2

– Meningkatkan keupayaan pengetahuan, Meningkatkan keupayaan pengetahuan, kreativiti dan innovasi negara serta kreativiti dan innovasi negara serta memupuk “minda kelas pertama”memupuk “minda kelas pertama”

– Apa yang dirancang?Apa yang dirancang?• 2 buah universiti di Terengganu dan Kelantan2 buah universiti di Terengganu dan Kelantan• RM 1.15 billion – menambahbaik kemudahan RM 1.15 billion – menambahbaik kemudahan

sekolah luar bandar khususnya di Sabah dan sekolah luar bandar khususnya di Sabah dan SarawakSarawak

• Bina 180 sekolah rendah, 229 sekolah Bina 180 sekolah rendah, 229 sekolah menengah dan sekolah berasrama penuhmenengah dan sekolah berasrama penuh

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contcont

• RMK 9: RMK 9: – Apa yang dirancang?Apa yang dirancang?

• RM 690 juta – membina rumah guru RM 690 juta – membina rumah guru sebahagiannya di kawasan luar bandarsebahagiannya di kawasan luar bandar

• RM 1.51 billion – program pengkomputeran RM 1.51 billion – program pengkomputeran sekolah dan RM 284 juta utk program sekolah dan RM 284 juta utk program pembestarian sekolahpembestarian sekolah

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contcont

• The measurement:The measurement:1.1. Human capital stockHuman capital stock

• The number of population completed their The number of population completed their education at various leveleducation at various level

• The number of labor force in professional The number of labor force in professional occupations (e.g. medical doctors, occupations (e.g. medical doctors, engineers) compared with the total engineers) compared with the total populationpopulation

2.2. Human capital development rate Human capital development rate within a periodwithin a period• Net increase in the number of people in Net increase in the number of people in

high level jobshigh level jobs

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contcont

• Other measurements/indicators:Other measurements/indicators:1.1. Number of teachers per 10,000 Number of teachers per 10,000

populationspopulations

2.2. Number of engineers and scientist per Number of engineers and scientist per 10,000 pop10,000 pop

3.3. Number of doctors and dentists per Number of doctors and dentists per 10,000 pop10,000 pop

4.4. Ratio of students registered at lower Ratio of students registered at lower educational level to the total number educational level to the total number of pop aged bet 5 to 14 yrof pop aged bet 5 to 14 yr

5.5. Ratio of students registered at tertiary Ratio of students registered at tertiary educational level to the total number educational level to the total number of pop aged bet 20 to 24 yrsof pop aged bet 20 to 24 yrs

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Human Capital and Labor Human Capital and Labor SupplySupply

• Labor supply:Labor supply: – Is linked to time allocation (mkt work vs other Is linked to time allocation (mkt work vs other

activities), activities), – Time is exchanged for income Time is exchanged for income – In the short run, In the short run,

• how long does one work to earn income is dependent how long does one work to earn income is dependent upon the following:upon the following:

– Wage rate; unearned income; income of the spouse; no Wage rate; unearned income; income of the spouse; no of children; household work; community workof children; household work; community work

• Individuals cannot change the market wage rateIndividuals cannot change the market wage rate• Wage rate differentials occur due to differences in Wage rate differentials occur due to differences in

individual labor quality (skill, knowledge, health etc)individual labor quality (skill, knowledge, health etc)

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Human Capital and Labor SupplyHuman Capital and Labor Supply … … contcont

• In the long run,In the long run,– Human capital can be upgraded through Human capital can be upgraded through

education and training which in turn influence education and training which in turn influence the labor earningthe labor earning

– The decision to offer/supply laborThe decision to offer/supply labor• is related to the is related to the “desired education level”“desired education level” (i.e. accept (i.e. accept

low paying job that offers OJT and high paying job low paying job that offers OJT and high paying job that require transfers to someplace elsethat require transfers to someplace else

• Influence family wellbeingInfluence family wellbeing– To ensure better future, achieve higher wellbeing and To ensure better future, achieve higher wellbeing and

standard of living, one is willing to spend money on standard of living, one is willing to spend money on tuition, move to someplace else, get a new jobtuition, move to someplace else, get a new job

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• In the long run,In the long run,– The adjustment of labor involve The adjustment of labor involve

assessment of current cost (low wage, assessment of current cost (low wage, transfer to someplace else) and future transfer to someplace else) and future return.return.• Thus, this adjustment is called Thus, this adjustment is called INVESTMENTINVESTMENT • The LR labor SS theory is called the The LR labor SS theory is called the Theory Theory

of Human capital investment decisionof Human capital investment decision

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• Types of Investment in Human Types of Investment in Human CapitalCapital– Investment in the workplaceInvestment in the workplace

• Formal and informal trainingFormal and informal training

– Investment outside the workplaceInvestment outside the workplace• SchoolingSchooling• HealthHealth• Seeking for employmentSeeking for employment

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• Measurement of Human CapitalMeasurement of Human Capital– The two main components: The two main components: Education Education

and trainingand training– Thus, human capital measurement is Thus, human capital measurement is

based on the return of these two based on the return of these two componentscomponents

– The return of other human capital The return of other human capital components such as health and components such as health and migration are difficult to measuremigration are difficult to measure

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• The rate of return on educationThe rate of return on education– Formally, it is the interest rate that Formally, it is the interest rate that

equates the cost of the investment with equates the cost of the investment with the present value of the stream of future the present value of the stream of future benefits from the investmentbenefits from the investment

– E.g Bob is contemplating an ‘O’ E.g Bob is contemplating an ‘O’ Level/SPM at age 17 and expects to Level/SPM at age 17 and expects to retire at age 56.retire at age 56.

THANK YOUTHANK YOU

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Documents

1 FEM 4204 HUMAN CAPITAL PLANNING & DEVELOPMENT: THE GOVT ZURONI MD. JUSOH RESOURCE MGT AND CONSUMER STUDIES, FACULTY OF HUMAN ECOLOGY